Aerodrome Finance (AERO) is a fourth-generation decentralized finance (DeFi) ecosystem. The platform combines an advanced Automated Market Maker (AMM) with liquidity-generating features, providing traders with unique opportunities. Here’s what you need to know about Aerodrome Finance.
Aerodrome serves a vital role as the central liquidity hub for the BASE blockchain economy. This positioning and its features have enabled the protocol to secure more than 29 K users and a TVL (total value locked) of more than $172M.
Source – Aerodrome Finance
What Problems Does Aerodrome Finance Attempt to Fix?
Aerodrome Finance helps solve several problems facing the DeFi sector. The network creates a better user experience by using algorithms and liquidity pools instead of market makers. This approach aligns with the project’s commitment to decentralization.
Security Concerns
Security issues remain a concern for blockchain users. Aerodrome Finance has completed multiple security audits, which have helped the firm earn a reputation as a secure option. Notably, the platform leverages Velodrome V2 architecture.
Protect Liquidity Providers
Another problem that liquidity pool providers have is that they often don’t have protections in place for those providing liquidity. Aerodrome Finance introduces a dynamic liquidity provision system specifically created to protect users from losses.
Benefits of Aerodrome Finance
Aerodrome Finance brings many benefits to the blockchain sector. The protocol is a vital component of the BASE ecosystem. It enables users to concentrate, trade, and create liquidity and markets. Notably, there are features inspired by Curve, Convex, and Uniswap to help users succeed.
High APYs
When it comes to building your portfolio, it’s all about finding the pools with the highest APY. Aerodrome has an average APY of 224.88% which is far above the market average. The network can maintain this APY leveraging its liquidity pools and positioning within the BASE community.
Minimal Fees
One of the main reasons why Aerodrome Finance continues to expand its user base is its low fees. The AMM protocol has low slippage, making it an ideal option for those seeking to save on overhead.
Token Swaps
Aerodrome Finance supports trades and direct token swaps. Token swaps are an effective way to trade assets with lower fees. Integrate this feature when possible and enjoy seamless asset swaps.
Passive Income
Aerodrome Finance offers secure passive income via liquidity and farming pools. You can deposit tokens into these smart contracts and receive rewards based on the amount and time. This option provides low risk as your original asset generates rewards.
How Does Aerodrome Finance Work?
Aerodrome Finance eliminates the need for an order book or centralized protocols. The network integrated smart contracts and liquidity pools, enabling users to add liquidity and secure passive returns.
AMM leverages these deep liquidity pools and smart contracts to facilitate trades versus a centralized order book. This approach provides permissionless trading and supports non-custodial operations.
Liquidity pools
The Aerodrome Finance liquidity pools are its main feature. These liquidity pools are divided into multiple sections. Users can select between active, stable, volatile, incentivized, and low TVL options. The flexibility is ideal because it enables traders to avoid more volatile options without restricting experienced users from venturing into riskier, high-yield scenarios.
Stable liquidity pools offer lower volatility and APYs. Those with a low-risk appetite will find this option a great place to start. Aerodrome Finance users can diversify their staked tokens across several pools. This maneuver helps to improve exposure and protect against losses in a single pool.
Yield Farming
Yield farming protocols are similar to staking options but have no lock-up period and varying APYs. They received the name farming pools because the way to secure the highest returns is to migrate your tokens to the highest-paying farming pool when possible. Aerodrome Finance integrates yield ramping and multiplication to further your efforts and increase capital efficiency.
Token (AERO)
Aerodrome Finance integrates a multi-token approach that separates governance from the liquid. This structure is common in the DeFi ecosystem as it enables platforms to provide more intricate governance to their community while preventing inflation.
AERO is the main utility token for the Aerodrome Finance economy. Users can pay fees, trade assets, and interact with liquidity and farming pools using AERO. The ERC-20 token has a limited issuance of 500 million over the project’s lifespan. Notably, 450 million were distributed as vote-locked tokens.
Aero
The second token used within the Aerodrome Finance network is the veAERO token. This NFT (Non-Fungible Token) is an ERC-721 standard asset. It provides token holders with direct action to the community voting mechanisms.
Governance
Aerodrome users stake veAERO to put forth proposals to a community vote. Users can request fee changes, new features, tokenomics, and more. Each proposal that acquires enough support gets implemented with the support of the community treasury.
How to Buy Aerodrome Finance
Currently, Aerodrome Finance is available for purchase on the following exchanges.
Uphold – This is one of the top exchanges for United States & UK residents that offers a wide range of cryptocurrencies. Germany & Netherlands are prohibited.
Uphold Disclaimer: Terms Apply. Cryptoassets are highly volatile. Your capital is at risk. Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment, and you should not expect to be protected if something goes wrong.
KuCoin – This exchange currently offers cryptocurrency trading of over 300 other popular tokens. It is often the first to offer buying opportunities for new tokens. Restrictions may apply, depending on location.
Gate.io – This exchange was established in 2013 and is one of the more popular & reputable exchanges. Gate.io currently accepts most international jurisdictions including Australia & the UK. USA & Canadian residents are prohibited.
Aerodrome Finance (AERO) – A Solid Liquidity Hub for BASE
Aerodrome Finance remains the central liquidity hub for the BASE economy. The AMM offers advanced features and an intuitive interface that makes it easy for new users to improve their results. For these reasons, Aerodrome Finance is a smart AMM to trade.
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